Correlation Between Kaltura and Nextera Energy
Can any of the company-specific risk be diversified away by investing in both Kaltura and Nextera Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kaltura and Nextera Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaltura and Nextera Energy, you can compare the effects of market volatilities on Kaltura and Nextera Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kaltura with a short position of Nextera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaltura and Nextera Energy.
Diversification Opportunities for Kaltura and Nextera Energy
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kaltura and Nextera is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kaltura and Nextera Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextera Energy and Kaltura is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kaltura are associated (or correlated) with Nextera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextera Energy has no effect on the direction of Kaltura i.e., Kaltura and Nextera Energy go up and down completely randomly.
Pair Corralation between Kaltura and Nextera Energy
Given the investment horizon of 90 days Kaltura is expected to generate 3.09 times more return on investment than Nextera Energy. However, Kaltura is 3.09 times more volatile than Nextera Energy. It trades about 0.22 of its potential returns per unit of risk. Nextera Energy is currently generating about -0.13 per unit of risk. If you would invest 129.00 in Kaltura on September 26, 2024 and sell it today you would earn a total of 106.00 from holding Kaltura or generate 82.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Kaltura vs. Nextera Energy
Performance |
Timeline |
Kaltura |
Nextera Energy |
Kaltura and Nextera Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kaltura and Nextera Energy
The main advantage of trading using opposite Kaltura and Nextera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaltura position performs unexpectedly, Nextera Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nextera Energy will offset losses from the drop in Nextera Energy's long position.Kaltura vs. Dubber Limited | Kaltura vs. Advanced Health Intelligence | Kaltura vs. Danavation Technologies Corp | Kaltura vs. BASE Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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